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With seasonality in play, the number of homes sales in San Francisco has increased an average of 13 percent from January to February over the past decade. Last month, the number of recorded home sales in San Francisco jumped 27.4 percent from the month before and February’s sales volume was 26.7 percent higher on a year-over-year basis, the first year-over-year increase in four months.
The median price paid for a property in San Francisco jumped to a record $945,000 in February, up 6.8 percent from January and 34.9 percent higher year-over-year, largely driven by an increase in the mix of higher priced home sales. As always, keep in mind that while movements in median sales price are a great measure of what’s in demand and selling, they’re not a great measure of actual appreciation despite what the headlines might say.
For the greater Bay Area, recorded sales volume increased an anemic 5.7% from January to February and remains 8.2 percent lower on a year-over-year basis, the slowest February since 2008. At the same time, the median sales price for a home in the Bay Area increased 2.9 percent to $540,000 and is up 33.3% year-over-year.
Opposite San Francisco, Solano County recorded a 26.7 percent year-over-year drop in sales volume, the greatest Bay Area decline. Second to San Francisco in terms of gains, the median sale price in Contra Costa County increased to $405,000 in February, up 30.2 percent year-over-year.
As always, keep in mind that DataQuick reports recorded sales which not only includes activity in new developments, but contracts that were signed (“sold”) months prior but are just now closing escrow (or being recorded) and any properties that were sold “off market.”

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Comments from “Plugged-In” Readers

  1. Posted by Craig

    Holy Sh!t. How long can this train keep rolling? New territory here and local millionaire generating IPO lockout expirations happening and coming for the foreseeable future.

  2. Posted by Sam

    Pretty scary.

  3. Posted by lol

    Volume is still pretty much on the low side. This spring will tell us if a significant number of sellers will come out of the woodwork and if it will absorb demand somehow.
    I think we’ll hit the 1M mark. Pretty amazing market.

  4. Posted by Truth

    I don’t see the spring unlocking more inventory simply because it’s spring. Not being able to lever up is the problem. Anyway, again, I said that the market wasn’t in a cooling phase a month ago …

  5. Posted by REpornaddict

    agreed, I saw no cooling down either – the constant records highs of median per sq foot, the low inventory etc.
    I was called out by ed for saying that San Francisco real estate is doing well a few weeks ago, but I’m sticking to that narrative!

  6. Posted by unwarrantedinlaw

    In late 08 and spring of 2009 around the time of that $562,000 median the message boards were heavily bearish. Most posters stated that the market was headed straight down from there. Though it seemed as if most people wanted the market to go lower so they could buy, which was counterintuitive.
    I wonder what the future holds for prices. The tone of posters today seems to be neutral. I have no strong opinion myself, and think with mild conviction that prices are going to continue to rise. Perhaps it’s “neither a buyer nor a seller be”.

  7. Posted by lol

    Truth,
    “Lever up” is not entirely what drives the market today. What’s happening is that cash rich buyers are in big enough numbers to control some parts of the market today. On some segments it’s all cash buyers.
    The “poor” buyers with only 20% down are having a very hard time today.

  8. Posted by lol

    unwarrantedinlaw,
    spring 2009 was a very special era. Everyone was running around with their heads cut-off. Bears had a ton of hubris and wanted to see more blood. Bulls were shaking their heads in disbelief.
    The bottom was probably reached march 2009. But it lingered until late 2011. I woke up as a born-again-bull in mid-2010.

  9. Posted by eddy

    A lot of activity in the less than $1M areas that are ripe for gentrification. Most everything in the Richmond below that figure is in contract and its a trend I’m seeing elsewhere in the city. My guess is this is driven by the rent vs buy situation and many are choosing to buy. I’m also seeing a fair bit of flip inventory hitting the market. The mid-high end also seems to be chugging along. The ultra high end $10M+ is doing just OK. I wonder if this will be the year we see 3800 Washington sell or the long stagnant 2090 Vallejo. No movement on the sharper image Lyon home. Not much prime inventory at the ultra high end. There is still a lot of wealth on the sidelines. All that said, I remain largely stunned at the SF markets resilience. Not sure why people keep talking about low inventory (actually, I am), but SF will continue to have low inventory. Wish we still had that regular update.

  10. Posted by anon

    The lede of the original is:
    “Bay Area home buyers were kept scrambling last month as a continued lack of inventory contributed heavily to a six-year low in sales.”
    Then:
    ““A number of factors can keep a lid on sales. Affordability, for example. Or hard-to-get mortgages. These factors certainly play a role today, but clearly the main culprit is an inadequate supply of homes for sale. It’s going to be fascinating to watch how things play out between now and June. At some point rising home prices will trigger a more significant increase in the number of homes on the market. It’s just a question of when,” said John Walsh, DataQuick president. ”
    And all cash transactions are down YoY
    “Buyers who appear to have paid all cash – meaning no sign of a corresponding purchase loan was found in the public record – accounted for 26.8 percent of sales in February, up from a revised 25.6 percent in January and down from 32.4 percent a year earlier. ”

  11. Posted by Truth

    Eh? I know that lol. The lever up comment had to do with why there’s an inventory scarcity.

  12. Posted by Jake

    The DQ data for YOY February has the look of SF being a bubble unto itself:
    - unit sales volume down everywhere except SF (26.7%) and the valley (4.8%)
    - median price up double digit percentage in all 8 of 9 Bay Area counties (Napa 8.4%)
    - SF has the highest percentage median price increase
    That doesn’t look like lack of inventory, unless you think inventory is better in SF than everywhere else in the Bay Area.

  13. Posted by anon2

    “The DQ data for YOY February has the look of SF being a bubble unto itself:”
    For price, SF median is up 34.9% YOY while for the the bay area as a whole it’s up 33.3%.
    For Volume, SF looks like an outlier, and it might well be. But look at the slope of the graph above at the YOY points (356 & 451). It’s so steep at both points that YOY comparisons are going to be very noisy. Especially for an index measuring recorded transactions since there’s noise in when the actual prices were set.

  14. Posted by Jake

    Good point to be careful not to infer much from this one month. A 3 month moving average would be much better. And I’m too lazy to look up the data for that.
    Median price tends to obscure how the SF market is really several markets. For example, in 2013 more housing units priced under $500K were sold than over $2M. I doubt very many buyers or sellers target both.
    The broader concern/observation is that volume was down in the entire east and north bay.
    The January 2014 inventory numbers aren’t much different from a year ago in the Bay Area.
    http://www.car.org/marketdata/data/countysalesactivity/
    Except for SF, this looks like classic sales momentum inverse to price momentum.
    And it looks like that in Southern California and Sacramento too.
    Compared to a year ago, almost all of California has much higher prices, higher interest rates, more inventory, and lower volume.

  15. Posted by anon

    Thankful for two things:
    We decided to move up into our bigger place two years ago (better to be lucky than good), and
    All these people paying truly absurd prices for SF places these days will be contributing scads of equally-inflated property taxes for years to fund services that I use. Always good to make do with OPM.

  16. Posted by Jill

    Another 30 or so new millionaires
    Health-care software firm Castlight soars after IPO
    CNBC.com 03/14/14 12:28 PM ET
    By: Bertha Coombs
    Castlight Health shares more than doubled in health-tech firm’s debut on the New York Stock Exchange, making it one the best first-day IPO performances of 2014, in a year when health-care listings have been a stand out.
    The San Francisco-based company, which specializes in pricing transparency software, raised $178 million after its initial public offering. The shares, which trade under the symbol CSLT, priced at $16 a share—above the already expected price range of $13 to $15, which had been boosted earlier in the week. With shares opening north of $40 in the first hours of trade, the IPO puts the company’s market valuation at more than $3 billion, despite the fact that it has yet to post a profit.
    You got to love all the smartest people coming up with world class solutions in our back yard. Please create in my backyard(CIMBY), buy in my back yard (BIMBY)and build in my backyard (BIMBY 2)

  17. Castlight Health: Most overpriced IPO of the century
    “Castlight’s insane level of valuation – 107 times revenue (not profits, as they had huge losses last year) – of the original IPO pricing hasn’t been seen for a tech deal since the year 2000, the twilight of the 20th century. Of the prior 13 deals priced at 100 times revenue or more and sales of at least $10 million, the average 3-year return was -92%.”
    “On its $13 million revenue base last year, it spent $34 million on sales and marketing, $15 million on R&D and $9 million on administrative costs. Bottom line: a $62 million net loss.”
    Year 2000 called and they want their valuations back.

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